Tuesday, March 29, 2011

Memoirs: Mexico City


Memoirs: Mexico city! 

(Reforma: “I feel”)
A walk on the streets of a colony, adorned by the wills of astute statesmen,
A passage in time well preserved, decorated by able craftsman;

(Zocalo: “I zeal”)
A melancholy successfully rejoiced - rectified of its gore remembrances,
A charade arrested in its bloom, amended for it’s reminisce reverence.

(Bellas artes: “I hold”)
A resolute charge of artists compelled by a nations’ daunting perplexity
An oath to find it’s identity over frescos that stitch patterns of society.

(Condessa: “I swirl”)
A hubbub of bold youth that drink to its beauty and glory,
A semblance of folklore and contemporary, united in effervescent story.

(Polanco: “I desire”)
The high streets of luxurious curios - picturesque in plush lawns and bistros,
Humbling edifice of auditoria secured in timeless collections of museos.

(Guadalupe: “I bow”)
Sacred strings of common thoughts for unstinting religious beliefs,
Bowing down to the cathedrals where holy lady blesses to relieves.

(People: “I love”)
Warm, sensitive, loving, beautiful – their eyes speak it all,
Who would rob you of your fears and pledge everything for your smile.

(City: “I honor”)
Mexico city and your wonders, you would charm me forever!


Thursday, March 17, 2011

Random world of mathematical infinite as defined in S=k.log(W)


Our changing views of the infinite!

While looking at the world around us, we cannot miss the harmony and order that meets our eye and refines our perception. Yet, when human mind has tried to understand what holds the nature together, it has faced defeat in putting the concept into easy bits of understanding.

Take for instance a simple trajectory formed by a ball when tossed from hand to another. We could see that the movement is definitive and we have a reflex to move and catch it at the frail end of the trajectory. We try to model this information into a logical equation - what we simply call as the motion. To understand it accurately, we break the path down into smaller parts and try to define coordinates from one path point to another. This process can be carried out infinite times, to break the path into infinitesimally ( ΔX ) smaller parts that would add most accurately to the final path, which to us would be the most definitive description of the motion.

To our simplified perception, ∑( ΔX ) = X, and we complete the trajectory by successfully predicting the trajectory and catching the ball.

How easily have we built our understanding on the use of the infinite! Wait for a moment, and think about it. we have broken the path down to "infinite" parts and then simply added these "infinite" parts to define our concept. It is this infinite, that has for centuries built a base for us to build smallest and the largest concepts.

The question remains of how well do we understand the "infinite": .

There have been attempts to unravel the infinite, take the circle for instance, you could fit a triangle, at the next level, quadrilateral, further a pentagon and keep increasing the equal sided polygons. What you would end up is an infinite sided polygon would be a perfect circle! Taking the concept further, if you were to draw lines from the center of the polygon to each vertex, then, you would have the entire area of the circle filled with lines. But, if we stretch our imagination a little further, and observe carefully, we would see that there would be still gaps between one vertex and another! Which would mean that after painfully building the infinite-sided polygon, we are unable to get a perfect circle!

This indeeds distorts our view that circle is perfectly rounded and leaves us with an indefinite view of what circle would look like. World it seems is not a perfection of order and harmony.

This disruption in order and perfection, because of the lack of understanding of the infinite has disturbed the normative characteristics of definite, the base of mathematics. It is true that one cannot build an edifice on thin air, thus, great works of mathematics could not be built on a limited knowledge of the infinite (which ironically is the building block of mathematics).

It was in such times that Georg Cantor built his famous theory that shook the world by bringing the infinite into the realms of arithmetics of infinite, thus destroying the definite view of concepts. This work was further carried out by Ludwig Boltzmann, who gave the final blow to the order and harmony by his revolutionary work in thermodynamics. He picked up from where Cantor left, suggesting that order and harmony is based not on the definite events but on the random collisions of atoms within the matter! While world understood events as symmetrical on time axis ( that is you could reverse an event and arrive back on the initial situation), entropy changed that viewpoint and brought decay into the heart of physics. Boltzmann went further to show probabilistic dependency of entropy, S=k.log(W) thus making the change irreversible. This proved that in what see as order, there remains an element of uncertainty at its core.

Thus, we have to believe that world after all is not definite! There is a chaos and randomness which is the pure essence of existence.

Indeed, randomness is our new constant!


Wednesday, March 9, 2011

Statistics are dangerous tools in the hands of inexpert or the biased

Was working on this problem for a friend and came across the thought of identifying what errors are grossed today and maybe some root causes of these issues:

Overestimation of causality: Most of the statistics text is mis-informed to be built on the principle of causality, which people take for granted. While clearly that is not the case - in simple words "they see elephants in the clouds instead of understanding that they are in fact randomly shaped clouds that appear to our eyes as elephants". This maturity would only come to a trained statistician, else everything would be oversimplified into patterns and normality.

Counter-intuitive distributions: This is antonym of the first one (in limited sense). Not everything is normal distribution and not everything can be fit to a bell curve. This premise is hardly checked before building any hypothesis.

Lack of understanding of characteristics of distributions: Seldom there are thoughts and efforts to see symptoms like(talking of commonly understood normal distribution) long tail, fat tail, kurtosis, skewness, etc. These are important yet forgotten episodes of analysis, for a simple fact that most amateurs are ignorant of how to deal with them.

Over dependency on chance and randomness: The base of probability is chance p(n), which assumes that the final output cannot be understood but probability can be identified with confidence level. There are other theories that build on deterministic models rather than chance models - chaos theory, lorentz attractor, relativity- unfortunately, due to their mathematical complexity they have been left for the work of physics and mathematics rather than we appreciating their objectivity in our "false world of randomness". There are cases where deterministic models are more appropriate than the random models.

Reducing complexity: The aim should be to simplify the problems rather than build more dynamics and complexity, but this cannot be achieved at the cost of neglecting vitality and objectivity of the outcome. This is also a critical area left unexplored.

While, I have tried to put my thoughts together for you to see which path you would want to develop, you would also observe that they might be contradicting (which is not wrong as we do not know what seems better). I feel all these aspects are grossly missed in building models and hypothesis. There are examples of VaR, financial exponentials and derivatives, inaccurate assessment of impact of interest rate revisions in economy, lack of accounting for the multiplier effect, oversimplification of regression in subsidy model, panic as observed by behaviorial economics, etc. that haunt us time and again.

There is a calling to understand how the best of works in physics, economics, mathematics, statistics, psychology can be cross leveraged to find new means of unified theory. I firmly believe - God does not play dice!"

Would appreciate your viewpoints and we could build the discussion here!